Chapter 21 Flashcards

1
Q

The term “retention” in an umbrella policy is similar to:

Select one:

a. supplementary
b. subrogation
c. deductible
d. franchise

A

The umbrella often provides better coverage than the underlying policy. For such claims the underlying policy won’t pay at all and the umbrella is stuck for the total claim unless it has a “self insured retention layer” specifying that the Insured will pay at least a relatively token amount. This “retention” acts as a deductible.

The correct answer is: deductible

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2
Q

Which deepens coverage only?

Select one:

a. umbrella
b. excess liability

A

The correct answer is: excess liability

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3
Q

An Excess Liability policy:

Select one:

a. deepens but does not broaden coverage.
b. eliminates the need for the underlying policy.

A

The correct answer is: deepens but does not broaden coverage.

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4
Q

A commercial umbrella does NOT cover:

Select one:

a. products and completed operations
b. home accidents
c. auto liability
d. premises and operations

A

The correct answer is: home accidents

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5
Q

Which expands the scope of coverage?

Select one:

a. excess liability
b. umbrella

A

The correct answer is: umbrella

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6
Q

If the insured with an umbrella must pay the first $1,000 of a claim, the insured must have had:

Select one:

a. an inadequate attorney
b. a self-insured retention layer

A

The claim obviously involved something covered by the umbrella which wasn’t covered by the underlying policy. In such a situation, the umbrella will require the Insured to pay some part of the claim. This amount (specified in the umbrella) is known as a Self Insured Retention Layer.

The correct answer is: a self-insured retention layer

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